In day trading, traders mostly wish to do buying and selling on small profits or else they look for overbought or oversold shares. Taking into consideration these important points following basic things you should look in for shares while choosing them for day trading.- Price Volatility- Volume (quantity)What exactly these terms mean and how to use them while Day Trading.
Price Volatility - The Price volatility means the movement (up and down) of share price should be more (or high) through out the day. In other words the fluctuation in share prices should be on high rate so that it will be easy for you to buy and sell on different prices. Suppose if share is moving up and down in very narrow range then on what price you will buy and sell? So it is always better if you choose shares which have high volatility in price movement. Do you want to know how to find out the high volatility shares then please click here?
Volume (quantity) - Volume means trading quantities. The shares which you choose for day trading should have high volumes (or high traded quantity).Why this is required? The high volume indicates that there is more liquidity. Liquidity means lots of transactions had took place on this share and more people are interested to trade in this share. This will ease your trading job because you will get more exposure to the price to buy and sell at anytime. Due to high volumes there will be also high price fluctuations.
BSE tipsPoints to remember for day trading Following are very important points to be always remember by day traders, Entry & exit points, stop loss limits, profit targets, your desired risk/reward profile, amount of capital to be committed to trades, how long you need to hold the share if incase it is against your favor.